New proposal restricts instant credit at cash register

Many consumers have been struggling with credit card debt in this economy.

So what do you think of a new proposal that would restrict instant credit at the cash register?

The Wall Street Journal is reporting that the proposed restrictions, if enacted by the Federal Reserve, would force retailers to gather more financial information from customers— including how much they earn— before giving them credit.

But some big retailers are balking at the proposals, which would make it a lot tougher for them to dole out instant credit at the cash register, the WSJ says.

That would endanger at least some popular cash-register pitches to “get 15% off today’s purchase” by opening a charge-card account on the spot, the WSJ reports.

Macy’s Inc., Saks Inc., Best Buy Co. and other retailers are fighting the proposed rules, claiming customers wouldn’t be comfortable handing over a pay stub or tax document to a cashier in order to show they can pay their bills.

“Instant credit is important because it is another service that we can offer the customer that the customer considers to be valuable,”  Jim Sluzewski, a spokesman for Macy’s, told the WSJ.

But instant credit also can get consumers deeper into debt if they act impulsively. Consumer advocates have said the proposed rules are a long-overdue victory for Americans bombarded with easy credit at terms that can be onerous, WSJ reports.

Do you favor or oppose this latest proposal? Why?

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6 comments Add your comment

PR

December 7th, 2009
9:02 am

Of course they oppose the move. They don’t give a damn about your debt load, all they want is your money. America needs to wake up…if the current trend continues and China keeps buying up our IOU’s, soon they won’t have to invade us….they’ll just call in the notes. China already owns a large chunk of the U.S. already. Get ready folks….Uncle Mao and his slant eyed goons are just around the corner.

Brian

December 7th, 2009
9:03 am

So the federal government is going to restrict me from taking advantage of TVM because someone else can’t handle credit? Makes no sense.

Tork

December 7th, 2009
10:43 am

I wouldn’t get upset at the Chinese. All fun aside. They work for very little, but they borrow nothing. You can’t save what you keep paying out. Instant credit. I would if the terms are good and I can pay it off right away. Saves me a trip to the bank is all.

Michael

December 7th, 2009
12:21 pm

This is going too far. Yes, consumers need protection from scammers, and lender abuse, but if I want to take advantage of a 10-15% discount for opening a crappy 29.9% APR store credit card, that is my right, and the government should stay out of my poor decisions.

phil

December 7th, 2009
4:48 pm

This is tremendous. Credit is not a right and so often, on impulse, consumers are pulled into debt that they can not afford. Buy what you can pay cash for, or save up until you can buy.

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